2015 EDITION
EQUINE
Sales & Use Tax
REVIEW
LEGAL COUNSEL
Equine Sales & Use Tax Review | 1
Contents
3
How to Use This Guide
23Maryland
4Arkansas
26 New Jersey
6California
28 New York
9Florida
30 North Carolina
12Illinois
32Ohio
16Indiana
36Oklahoma
18Kentucky
38Pennsylvania
21Louisiana
42Texas
44 West Virginia
46 Dean Dorton
50 Dinsmore Legal Counsel
2 | Equine Sales & Use Tax Review
How to Use This Guide
The information is intended to be a guide and reference tool for practitioners — it is not intended and shall not be relied on for legal or tax advice. State legislation
and regulation is subject to frequent change. Every practitioner should research their specific facts and verify the various state tax provisions at that time.
The authors intend to update this publication frequently and will endeavor to have the citations updated frequently. Please check the firms’ websites for the most
up-to-date version at www.ddafcpa/publications.html.com or www.dinsmore.com/equinetaxbook.
Overview
Racehorses and show horses are typically
purchased and used in multiple states.
Their often sizable value and the patchwork
of differing state sales and use tax rules
can create significant sales and use tax
exposures. This publication is an effort
to begin developing a resource on the
application of various states’ sales and
use tax rules as they apply specifically to
these businesses. It is a work in progress.
We anticipate adding states and refining
the discussion and appreciate input
and observations from advisors to and
participants in the equine business and will
post updated versions on our firms’ websites.
The information provided herein is general
in nature and may not be used as tax or legal
advice. Please consult a professional advisor
on your specific situation.
Sales and Use Tax
The sales tax is typically imposed on the
retail sale of tangible personal property
in the state. Some states also tax leases of
such property. Additionally, a few states
tax the sale of services. States also exempt
certain types of tangible personal property
from the sales tax. The tax is imposed on
the purchaser of the property, but collected
and remitted by the seller. Some states
provide sellers with an exception from the
requirement to collect and remit sales tax
when they only make taxable sales on an
“occasional” or “isolated” basis.
The use tax is paid directly by the owner of
the property to the state where the property
is used. Most states permit a credit against
the use tax for sales tax paid on the purchase
of property to another state. As in the case
of the sales tax, states also exempt certain
types of tangible property from the use tax.
Sales of horses may be exempt from the
sales tax on any number of bases. Some
states exempt the sale of horses used for
particular purposes, such as breeding or
racing. States will often exempt horses
purchased for re-sale. States will also often
exempt the seller from collecting sales tax
on horses delivered out of state. Most states
do not impose the sales tax on services or
on intangible property, so the nature of the
item being sold under the relevant state law
impacts whether or not sales tax will be due.
Some states treat leases as sales subject to
the sales tax.
The use of horses may be exempt from the
use tax on a number of bases. Some states
exempt “temporary” use of a horse in their
state. Some states exempt the use of a
horse that was purchased some time prior
to importation into the state for use or prior
to establishment of residence or commercial
domicile in the state. As in the case of sales
tax, states may exempt horses used for
particular purposes from the use tax. And they will often exempt horses held
for re-sale from the use tax. Some states
treat leases of property used in the state as
subject to the use tax, even where the owner
of the property is not domiciled in the state.
States may impose the use tax on the
purchase price of the property, its fair
market value at the time it becomes subject
to use tax, the lower or higher of the two or
some capped amount.
Use Tax
The use tax serves as a complement to the
sales tax. It is typically imposed on the
storage, use, or consumption of tangible
property upon which no sales tax was paid
to the state where the property is used.
Foreign Sales
This guide does not currently address
purchases or sales of horses from and to
foreign countries. If a transaction involves
another country, then inquiry should be
made as to possible tax impact of such
a transaction and international treaties
that may apply, as well as United States
constitutional issues regarding export
of goods.
Request for Comments, Edits,
Supplemental Cites and Cases
Should you become aware of any errors
or updates, please e-mail the authors and
we will incorporate any changes into the
online edition prior to the next print edition.
This is a free publication so we do appreciate
any input to keep it up to date.
Many thanks in advance for your assistance.
Please check the websites listed above for
the latest version.
Equine Sales & Use Tax Review | 3
Arkansas
Sales Tax — 6% State Rate
Mares
Generally subject?
No. Livestock is generally not taxable under Ark. Code Ann.
§ 26-52-401(18)(A)(iv). Horses fall within the definition of livestock.
Ark. Admin. Code 006.05.212-GR-42.
Exceptions
Exemption does not apply when the goods are sold at or from an
established business unless that business is located on the seller’s
farm. Ark. Code Ann. § 26-52-401(18)(C)(i).
Can buyer take possession
in the state?
No
Stallions
Generally subject?
No. Livestock is generally not taxable under Ark. Code Ann.
§ 26-52-401(18)(A)(iv). Horses fall within the definition of livestock.
Ark. Admin. Code 006.05.212-GR-42.
Exceptions
Exemption does not apply when the goods are sold at or from an
established business unless that business is located on the seller’s farm.
Ark. Code Ann. § 26-52-401(18)(C)(i).
Stallion Shares
Should be same treatment as stallions.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property.
Sales of services are exempt unless specifically designated as
taxable. Ark. Code Ann. § 26-52-301. No specific authority.
Exceptions
N/A
Lifetime Breeding Rights Racehorses
Generally subject?
No. Livestock is generally not taxable under
Ark. Code Ann. § 26-52-401(18)(A)(iv). Horses fall
within the definition of livestock. Ark Admin.
Code 006.05.212-GR-42.
Exceptions
Exemption does not apply when the goods
are sold at or from an established business
unless that business is located on the seller’s
farm. Ark. Code Ann. § 26-52-401(18)(C)(i).
Shipping out of state within
a short time-frame
If buyer takes possession out of state, treated
as interstate commerce and not subject to
sales tax. Ark. Admin. Code 006.05.212-GR-5.
Re-seller (Pinhooker)
Sale-for-resale transactions exempt under
Ark. Admin. Code 006.05.212-GR-53 if proper
permits obtained.
Sales directly by the breeder
Not taxable unless sold from established
business not located on farm. Ark. Code
Ann. § 26-52-401(18)(B).
Sales at auction
Yes. Horses sold at auction appear to be
generally subject. Livestock not taxable under
Ark. Code. Ann. § 26-52-401(18)(A)(iv) unless the
goods are sold at or from an established
business not located on the seller’s farm.
By occasional sale
“Isolated sales” not made by an established
business are exempt. Ark. Code Ann.
§ 26-52-401(17).
Generally subject?
N/A. Probably a non-taxable service or sale of intangible property.
Sales of services are exempt unless specifically designated as
taxable. Ark. Code Ann. § 26-52-301. No specific authority.
Exceptions
N/A
Generally subject?
Yes. Horses sold at claiming races appear to be
generally subject.
Sale includes the lease and rental of tangible personal property.
Ark. Code Ann.§ 26-52-103(18)(B).
Exceptions
Exemption does not apply when the goods are
sold at or from an established business unless that business is located on the seller’s farm.
Ark. Code Ann..§ 26-52-401(18)(C)(i).
Shipping out of state
within a short timeframe
No exceptions noted.
Other
Leasing
4 | Equine Sales & Use Tax Review
Claiming
Arkansas
Use Tax — 6% State Rate
Mares
Generally subject?
Exceptions
No. Same exemptions as sales tax pursuant to Ark. Admin. Code
006.05.212-UT-9(A). Livestock not taxable under Ark. Code Ann.
§ 26-52-401(18)(A)(iv). Horses fall within the definition of livestock.
Ark. Admin. Code 006.05.212-GR-42.
Exemption does not apply when the goods are purchased at or from an
established business unless that business is located on the seller’s farm.
Ark. Code Ann. § 26-52-401(18)(C)(i).
Racehorses
Generally subject?
No. Same exemptions as sales tax pursuant to
Ark Admin. Code 006.05.212-UT-9(A). Livestock not
taxable under Ark. Code Ann. § 26-52-401(18)(A)(iv).
Horses fall within the definition of livestock.
Ark. Admin. Code 006.05.212-GR-42.
Exceptions
Purchases at auction appear to be generally
subject. Exemption does not apply when the goods
are sold at or from an established business unless
that business is located on the seller’s farm. Ark.
Code Ann. § 26-52-401(18)(C)(i).
Re-seller (Pinhooker)
Purchase-for-resale transactions exempt under
Ark. Admin. Code 006.05.212-GR-53 if proper
permits obtained.
Stallions
Generally subject?
Exceptions
No. Same exemptions as sales tax pursuant to Ark. Admin. Code
006.05.212-UT-9(A). Livestock not taxable under Ark. Code Ann.
§ 26-52-401(18)(A)(iv). Horses fall within the definition of livestock.
Ark. Admin. Code 006.05.212-GR-42.
Exemption does not apply when the goods are purchased at or from an
established business unless that business is located on the seller’s farm.
Ark. Code Ann. § 26-52-401(18)(C)(i).
Stud Fees
Generally subject?
Exceptions
Claiming
If exemption exists for sales tax, would also apply for use tax.
Ark. Admin. Code 006.05.212-UT- May also be a non-taxable service
or sale of intangible property. Purchases of services are exempt unless
specifically designated as taxable. Ark. Code Ann. § 26-52-301.
Exceptions
Yes. Horses purchased at claiming races appear to be
generally subject.
Exceptions
Exemption does not apply when the goods are
purchased at or from an established business unless
that business is located on the seller’s farm.
A.C.A. § 26-52-401(18)(C)(i).
Re-seller (Pinhooker)
Purchase-for-resale transactions exempt under
Ark. Admin. Code 006.05.212-GR-53 if proper
permits obtained.
N/A
Breeding Rights Generally subject?
Generally subject?
If exemption exists for sales tax, would also apply for use tax.
Ark. Admin. Code 006.05.212-UT- May also be a non-taxable service
or sale of intangible property. Purchases of services are exempt unless
specifically designated as taxable. Ark. Code Ann. § 26-52-301.
N/A
Other
Credit Against Use Tax Leasing
Yes. Use tax does not apply on any transaction where sales tax is levied. Ark. Admin. Code 006.05.212-UT-9(A).
Leases treated same as purchase. Ark. Admin. Code 006.05.212-UT-3(I).
Equine Sales & Use Tax Review | 5
California
Sales Tax — 7.25% State Rate (up to 8.75% including local taxes)
Mares
Generally subject?Yes.
Exceptions
Racehorse (but not other horse) breeding stock is partially exempt from sales tax. Code section 6358.5, Regs section 1535.
Stallions
Generally subject?Yes.
Exceptions
Racehorse (but not other horse) breeding stock is partially exempt from sales tax. Code section 6358.5, Regs section 1535.
Stallion Shares
Generally taxable. See Agnew v. Cal. State Bd. of Equalization, 2003 WL 21464990, at *11 (Cal. Ct. App. June 25, 2003) (rev’d on other grounds).
Stud Fees
Generally subject?
Probably no — the sale of the right to breed is not the sale of tangible personal property. CA SUTA Series 110, Jan. 1, 2006.
Lifetime Breeding Rights Generally subject?
Probably no — the sale of the right to breed is not the sale of tangible personal property. CA SUTA Series 110, Jan. 1, 2006.
Racehorses/Showhorses
Generally subject?Yes.
Claiming
Generally subject?
Yes. Code 6015(a)(3). Sales at claiming races do not count towards occasional sale limits (track is the retailer).
Other
Shipping out of state Nonresident/non-commercially domiciled purchaser must take possession outside of the state to be exempt. Regs section 1620 (3(A)-(B).
Re-sales
Exempt with resale certificate. Code section 6092.
Occasional sales
Exempt if less than 3 sales in 12 months. Regs section 1595.
Sales directly by the breeder
No exemptions noted.
Sales at auction
No exemptions noted.
Leasing
Treated as sale.
6 | Equine Sales & Use Tax Review
California
Use Tax — 7.25% State Rate (up to 8.75% including local taxes)
Mares
Generally subject?Yes.
Exceptions
Racehorse (but not other horse) breeding stock is partially exempt from use tax. Code section 6358.5, Regs section 1535.
Stallions
Generally subject?Yes.
Exceptions
Racehorse (but not other horse) breeding stock is partially exempt from use tax. Code section 6358.5, Regs section 1535.
Stud Fees
Generally subject?
Probably no — the purchase of the right to breed is not the purchase of tangible personal property. CA SUTA Series 110, Jan. 1, 2006.
Lifetime Breeding Rights Generally subject?
Probably no — the purchase of the right to breed is not the purchase of tangible personal property. CA SUTA Series 110, Jan. 1, 2006.
Racehorses/Showhorses
Generally subject?Yes.
Other
Credit Against Use Tax Yes. Code section 6406.
Leasing
Same treatment as a purchase. Code section 6006. No credit for lease payments. Code section 6406.
Re-salesExempt.
Equine Sales & Use Tax Review | 7
California
Notes and Comments
California has numerous sales tax rates for the state and localities as follows:
}
1.
The state rate is 7.25% comprised of the following:
›
4.75% state general fund tax under Code section 6051.
›
0.5% state local revenue fund under code section 6051.2.
›
0.5% state local public safety fund tax under California Constitution section 35, Article XIII.
›
0.25% state general fund under Code section 6051.3.
›
0.25% state fiscal recovery fund tax under Code section 6051.5.
›
Cities or counties may impose up to 1.5% local (county/city) tax comprised of 0.25% for county transportation funds and 0.75% for city and county operations
under Code section 7203.1 and an additional 0.5%. See www.boe.ca.gov/pdf/pub71.pdf for additional information.
McConville v. State Board of Equalization, 85 Cal.App.3d 156, 149 Cal.Rptr. 194 1978.
Quarter horse case involved broodmare purchased for resale that was subsequently bred.
Relevant statute is California Revenue and Taxation Code section 6201-7273.
Court held that subsequent breeding was necessary to sell horses and didn’t change the intent to resell requirement and therefore the horses were not subject to use
tax. If the plaintiff ultimately retains the mares, then use tax will be due.
2. Agnew v. California State Board of Equalization, 2003 WL 21464990 (Cal. App. 2 Dist., June 25, 2003). (unpublished)
Taxpayer disputed that sales tax was due on syndication of thoroughbred stallion, DESERT WINE. Taxpayer attempted to argue that sale of fractional interests was
transfer of services rather than property and the cumulative sale was single sale.
The Court held sale of fractional interests was sale of tangible property and that syndicate owned the horse. Court held that sale was not the sale of a limited
partnership interest or sale of services only and that each sale of each fractional interest was a sale, thus cumulative transaction not eligible for occasional sale
exemption. Sale of fractional interests were individual sales and not sold into a limited partnership. The Court held that the Board determined more than 40 years
prior to the case that each fractional interest represented an undivided ownership interest in the horse (quoting the syndicate agreement at length and Annotation
540.0300). This is to be distinguished from the sale of an annual nomination (right to breed a mare) which is not subject to sales tax as it is not tangible personal
property (Annotation 540.0600).
8 | Equine Sales & Use Tax Review
Florida
Sales Tax — 6% State Rate
Mares
Generally subject?
Yes. FAC r. 12A-1.049(1).
Exceptions
The sale of equine livestock for breeding purposes is exempt. FAC r. 12A-1.049(6). Sales made by a producer are exempt.
FAC r. 12A-1.049(1).
Stallions
Generally subject?
Yes. FAC r. 12A-1.049(1).
Exceptions
The sale of equine livestock for breeding purposes is exempt. FAC r. 12A-1.049(6). Sales by a producer are exempt. FAC r. 12A-1.049(1).
Stallion Shares
Probably treated the same as stallions — no authority.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property — no authority.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property — no authority.
Racehorses/Showhorses
Generally subject?
Yes. FAC r. 12A-1.049(4).
Claiming
Generally subject?
Yes, collected only on maximum amount for which a horse is sold at a claiming race one time only during the racing season.
FAC r 12A-1.049(5).
Other
Shipping out of state Nonresident/non-commercially domiciled purchaser must take possession outside state to be exempt. Fla. Stat. Ann. § 212.06(5)(a).
Re-sales
Exempt. FAC r. 12A-1.039.
Occasional sales
Exempt if seller has paid all sales or use tax and no more than 2 sales within 12 months. FAC Rule 12A-1.037(3).
Sales directly by the breeder
Exempt, even where owner is not a Florida resident. FAC r 12A-1.049(3).
Sales at auction
No exemptions noted.
Leasing
Taxed as sale.
Equine Sales & Use Tax Review | 9
Florida
Use Tax — 6% State Rate
Mares
Generally subject?
Taxable if used within FL. FSA § 212.06(8)(a).
Exceptions
Use for breeding purposes in the state is exempt. FAC r. 12A-1.049(6).
Stallions
Generally subject?
Taxable if used within FL. FSA § 212.06(8)(a).
Exceptions
Use for breeding purposes in the state is exempt. FAC r. 12A-1.049(6).
Stud Fees
Generally subject?
Probably a non-taxable service or use of intangible property — no authority.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or use of intangible property — no authority.
Racehorses/Showhorses
Generally subject?
Yes. FAC r. 12A-1.049(4).
Other
Credit Against Use Tax Yes. FSA § 212.06(7).
Leasing
Same treatment as a sale. FSA § 212.05.
Re-sales
Exempt. FAC r. 12A-1.039.
Prior use outside the state
Items purchased and used in another state for six months or longer before importation are exempt. FSA § 212.06(8)(a).
10 | Equine Sales & Use Tax Review
Florida
Notes and Comments
1.
Department of Revenue v. Ocala Breeders’ Sales, Inc., 725 So.2d 387 (Fla. Dist. Ct. App. 1998).
Taxpayer, Ocala Breeders’ Sales (OBS), is a public Thoroughbred auction company. OBS included information about pedigrees and race records in its catalogs,
which it gave to prospective buyers. The Florida Department of Revenue imposed a use tax on the amount paid to obtain records on the horses. The appellate
court, interpreting Fla. Stat. § 212.05, reversed the district court and held that a use tax could not be imposed for the gathering of information for the catalogs’
production. The court first discussed the language of the statute, stating that Ocala was providing an auctioneering service, not a retail service. It then focused
on the fact that the costs incurred by Ocala in producing the brochure did not add to the cost of the brochures, which were given away for free. Additionally,
the court did not believe the legislature intended to tax clients for using opinions obtained from professionals.
Equine Sales & Use Tax Review | 11
Illinois
Racehorses
Generally subject?
Sales Tax — 6.25% State Rate
Mares
Generally subject?
Yes. 35 Ill. Comp. Stat. 120/2.
Exceptions
Exempt if registered with and meeting the requirements of any of the following:
Arabian Horse Club Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or Jockey Club, and used
for purposes of breeding or racing for prizes. 35 Ill. Comp. Stat. 120/2-5(27).
Can buyer take possession
in the state?
No – must take possession out of state to be exempt as interstate commerce
unless exempt under 35 Ill. Comp. Stat. 120/2-5(27). 86 Ill. Admin. Code 130.610.
Stallions
Generally subject?
Yes. 35 Ill. Comp. Stat. 120/2.
Exceptions
Exempt if registered with and meeting the requirements of any of the following:
Arabian Horse Club Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or Jockey Club, and used
for purposes of breeding or racing for prizes. 35 Ill. Comp. Stat. 120/2-5(27). Additionally, pursuant to 86 Ill. Admin. Code R. 130.2100, farmers or producers of
breeding livestock are not liable for retailer’s occupational tax (sales tax) with
respect to gross receipts realized from sales of stallions for breeding purposes.
Stallion Shares
Interests in of horses likely treated same way as horses under 35 Ill. Comp. Stat.
105/2-5(27).
Stud Fees
Generally subject?
No direct authority. Probably a non-taxable service or sale of intangible property .
Exceptions
N/A
Lifetime Breeding Rights Generally subject?
Exceptions
No direct authority. Probably a non-taxable service or sale of intangible property
or possibly exempt if registered with any of the Arabian Horse Club Registry of
America, Appaloosa Horse Club, American Quarter Horse Association, United
States Trotting Association, or Jockey Club. 35 Ill. Comp. Stat. 120/2-5(27).
N/A
Exceptions
Shipping out of state within
a short time-frame
Re-seller (Pinhooker)
Not if registered with any of the following: Arabian Horse
Club Registry of America, Appaloosa Horse Club, American
Quarter Horse Association, United States Trotting
Association, or Jockey Club. 35 Ill. Comp. Stat. 120/2-5(27).
N/A
No specific exception found. Likely must qualify as
interstate commerce (possession accepted out of state) to
avoid taxation. 35 Ill. Comp. Stat. 120/2-60 and 86 Ill. Admin. Code 130.610.
Resellers are excluded from the sales tax. 86 Ill. Admin.
Code R. 130.120(c).
Sales directly by the breeder Exempt if registered with and meeting the requirements
Sales at auction
By occasional sale
of any of the following: Arabian Horse Club Registry of
America, Appaloosa Horse Club, American Quarter Horse
Association, United States Trotting Association, or Jockey
Club, and used for purposes of breeding or racing for prizes.
35 ILC 105/2-5(27). Additionally, pursuant to 86 Ill. Admin.
Code R. 130.2100, farmers or producers of breeding livestock
are not liable for retailer’s occupational tax (sales tax) with
respect to gross receipts realized from sales of stallions for
breeding purposes.
Likely taxable unless registered with and meeting the
requirements of any of the following: Arabian Horse Club
Registry of America, Appaloosa Horse Club, American
Quarter Horse Association, United States Trotting
Association, or Jockey Club, and used for purposes of
breeding or racing for prizes. 35 ILC 105/2-5(27).
“A person who does not hold himself out as being engaged
(or who does not habitually engage) in selling such tangible
personal property at retail, or a sale through a bulk vending
machine, does not constitute engaging in a business of
selling such tangible personal property” and sales tax does
not apply to sales by such a person. 35 Ill. Comp. Stat. 120/1.
Claiming
Generally subject?
Yes. 35 Ill. Comp. Stat. 120/2
Exceptions
Exempt if registered with and meeting the requirements
of any of the following: Arabian Horse Club Registry of
America, Appaloosa Horse Club, American Quarter Horse
Association, United States Trotting Association, or Jockey
Club, and used for purposes of breeding or racing for prizes.
35 Ill. Comp. Stat. 105/2-5(27).
Shipping out of state
within a short timeframe No direct authority. Likely must take possession out of
12 | Equine Sales & Use Tax Review
state to be exempt as interstate commerce. 86 Ill. Code
R. 130.610.
Illinois
Use Tax — 6.25% State Rate
Mares
Generally subject?
Yes. 35 Ill. Comp. Stat. 105/3.
Exceptions
Exempt if registered with and meeting the requirements of any of the following: Arabian Horse Club Registry of America, Appaloosa Horse Club, American Quarter Horse
Association, United States Trotting Association, or Jockey Club, and used for purposes of breeding or racing for prizes. 35 Ill. Comp. Stat. 105/3-5(21).
Stallions
Generally subject?
Yes. 35 Ill. Comp. Stat. 105/3.
Exceptions
Exempt if registered with and meeting the requirements of any of the
following: Arabian Horse Club Registry of America, Appaloosa Horse Club,
American Quarter Horse Association, United States Trotting Association,
or Jockey Club, and used for purposes of breeding or racing for prizes. 35 Ill. Comp. Stat. 105/3-5(21).
Racehorses
Generally subject?
Yes. 35 Ill. Comp. Stat. 105/3.
Exceptions
Exempt if registered with and meeting the
requirements of any of the following: Arabian
Horse Club Registry of America, Appaloosa Horse
Club, American Quarter Horse Association, United
States Trotting Association, or Jockey Club, and
used for purposes of breeding or racing for prizes.
35 Ill. Comp. Stat. 105/3-5(21).
Re-seller (Pinhooker)
Resellers are exempt. 86 Ill. Code. R. 150.306(a)(1).
Stud Fees
Generally subject?
Exceptions
No direct authority. Probably a non-taxable service or sale
of intangible property.
N/A
Breeding Rights Generally subject?
Exceptions
No direct authority. Probably a non-taxable service or sale of intangible
property or possibly exempt if registered with and meeting the requirements
of any of the following: Arabian Horse Club Registry of America, Appaloosa
Horse Club, American Quarter Horse Association, United States Trotting
Association, or Jockey Club, and used for purposes of breeding or racing
for prizes. 35 Ill. Comp. Stat. 105/3-5(21).
N/A
Claiming
Generally subject?
Yes. 35 Ill. Comp. Stat. 105/3.
Exceptions
Exempt if registered with and meeting the
requirements of any of the following: Arabian
Horse Club Registry of America, Appaloosa Horse
Club, American Quarter Horse Association, United
States Trotting Association, or Jockey Club, and
used for purposes of breeding or racing for prizes.
35 Ill. Comp. Stat. 105/3-5(21).
Re-seller (Pinhooker)
Resellers are exempt. 86 Ill. Code. R. 150.306(a)(1).
Other
Credit Against Use Tax Leasing
A credit against the Illinois use tax is allowed on property acquired
outside the state and brought into Illinois, to the extent of taxes properly
due and paid on the sale, purchase, or use of the property in another
state, including the District of Columbia. 35 Ill. Comp. Stat. 105/3-55 (d);
Ill. Admin. Code 86 §150.310(a)(3).
Party leasing tangible personal property is subject to use tax unless an
exemption applies. 86 Code R. 130.2013(a).
Equine Sales & Use Tax Review | 13
Illinois
Notes and Comments
1.
Estate of Graham v. Department of Revenue, 516 N.E.2d 617 (Ill. App. Ct. 1987).
The operators of two horse farms argued that their purchase of horses was exempt under 86 Ill. Admin. Code 130.2100, which provides a tax exemption for
gross receipts realized from the sale of servicing animals for breeding purposes. The Department had found that each of the horses had been used at least
once for racing purposes. The court held that the horse owners could not overcome the Department’s prima facie case merely by denying the accuracy of
the assessments, and the horse owners had failed to present evidence that these particular horses were used for breeding at all. NOTE: Under 35 Ill. Comp.
Stat. 105/3-5(27) and 35 Ill. Comp. Stat. 105/3-5(21), horses and interests of horses are now exempt from sales and use tax if registered with and meeting the
requirements of the Arabian Horse Club Registry of America, Appaloosa Horse Club, American Quarter Horse Association, United States Trotting Association,
or Jockey Club, as appropriate, and used for purposes of breeding or racing for prizes.
14 | Equine Sales & Use Tax Review
Notes
Equine Sales & Use Tax Review | 15
Indiana
Sales Tax — 7% State Rate
Mares
Generally subject?
Racehorses
Yes. 45 Ind. Admin. Code 2.2-5-5.
Generally subject?
Yes. 45 Ind. Admin. Code 2.2-5-5.
Exceptions
Sales to a registered retailer for resale in the regular course
of business are exempt. 45 Ind. Admin. Code 2.2-5-5.
Exceptions
Sales to a registered retailer for resale in
the regular course of business are exempt.
45 Ind. Admin. Code 2.2-5-5.
Can buyer take possession
in the state?:
Nonresident purchaser must take possession outside state to be
exempt. 45 Ind. Admin. Code 2.2-5-53(b).
Shipping out of state
within a short time-frame
Nonresident purchaser must take
possession outside state to be exempt.
45 Ind. Admin. Code 2.2-5-53(b).
Re-seller (Pinhooker)
Sales to a registered retailer for resale are
exempt. 45 Ind. Admin. Code 2.2-5-5.
Sales directly by
the breeder
Taxable. 45 Ind. Admin. Code 2.2-5-5.
Sales at auction
Yes. 45 Ind. Admin. Code 2.2-4-33 states
that sellers at an auction are “retail
merchants,” meaning that their sales
are subject to sales tax.
By occasional sale
Exempt if meets definition (note: Indiana
refers to occasional sales as “casual sales.”)
45 Ind. Admin. Code 2.2-1-1(d).
Stallions
Generally subject?
Yes. 45 Ind. Admin. Code 2.2-5-5.
Exceptions
Sales to a registered retailer for resale in the regular course
of business are exempt. 45 Ind. Admin. Code 2.2-5-5.
Stallion Shares
Probably treated the same as stallions — no authority.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property
— no authority.
Exceptions
N/A
Lifetime Breeding Rights
Generally subject?
Exceptions
16 | Equine Sales & Use Tax Review
Probably a non-taxable service or sale of intangible property
— no authority.
N/A
Claiming
Generally subject?
Yes. 45 Ind. Admin. Code 2.2-5-5.
Exceptions
Sales to a registered retailer for resale in
the regular course of business are exempt.
45 Ind. Admin. Code 2.2-5-5.
Shipping out of state
within a short time-frame
Nonresident purchaser must take
possession outside state to be exempt.
45 Ind. Admin. Code 2.2-5-53(b).
Indiana
Use Tax — 7% State Rate
Mares
Generally subject?
Taxable. Ind. Code § 6-2.5-3-2.
ExceptionsNone.
Stallions
Generally subject?
Taxable. Ind. Code § 6-2.5-3-2.
ExceptionsNone.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property – no authority.
ExceptionsN/A
Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property – no authority.
ExceptionsN/A
Racehorses
Generally subject?
Taxable. Ind. Code § 6-2.5-3-2.
ExceptionsN/A
Re-seller (Pinhooker)
Sales to a registered retailer for resale are exempt. 45 Ind. Admin. Code 2.2-5-5.
Claiming
Generally subject?
Taxable. Ind. Code § 6-2.5-3-2.
ExceptionsN/A
Re-seller (Pinhooker)
Sales to a registered retailer for resale are exempt. 45 Ind. Admin. Code 2.2-5-5.
Other
Credit Against Use Tax Leasing
Yes. Ind. Code § 6-2.5-3-5.
Treated as a sale. Ind. Code § 6-2.5-4-10.
Equine Sales & Use Tax Review | 17
Kentucky
Sales Tax — 6% State Rate
Mares
Generally subject?
Exceptions
Yes. KRS § 139.531(1)(b).
The sale of a horse for breeding purposes is exempt. KRS § 139.531(2)(a).
Stallions
Generally subject?
Exceptions
Stallion Shares
Yes. KRS § 139.531(1)(b).
The sale of a horse for breeding purposes is exempt. KRS § 139.531(2)(a).
The sale of shares of a horse for breeding purposes is exempt. KRS § 139.531(2)(a).
Stud Fees
Generally subject?
Sales taxes apply to “fees paid for breeding a stallion to a mare in this state.” KRS § 139.531(1)(a).
Lifetime Breeding Rights Generally subject?
Yes. See Calumet Farm, Inc. v. Revenue Cabinet, 793 S.W.2d 830 (Ky. Ct. App. 1990)
Racehorses/Showhorses
Generally subject?
Exceptions
Yes. FAC r. 12A-1.049(4).
The sale of horses less than two years of age to a non-resident/non-commercial domicile of Kentucky is exempt. KRS § 139.531(2)(d)
Claiming
Generally subject?
Yes. Tax applies to “the sales price of any horse claimed at any race meeting within this state.” KRS 139.531(1)(c).
Other
Shipping out of state Re-sales
Occasional sales
Sales directly by the breeder
Sales at auction
Leasing
18 | Equine Sales & Use Tax Review
Purchaser must generally take possession outside state to be exempt. KRS 139.200(1)(a).
Purchases of horses for resale are exempt, so long as the horses are not used in racing or showing before resale. KRS § 139.270; 139.290.
Exempt where seller has less than two retail sales during any 12-month period. KRS 139.010(15).
No exemptions noted.
No exemptions noted.
Taxed as a sale. KRS 139.010(6)(a).
Kentucky
Use Tax — 6% State Rate
Mares
Generally subject?
Exceptions
Yes. KRS § 139.531.
The use of a horse for breeding purposes is exempt. KRS 139.531(2)(a).
Stallions
Generally subject?
Exceptions
Yes. KRS § 139.531.
The use of a horse for breeding purposes is exempt. KRS 139.531(2)(a).
Stud Fees
Generally subject?
Yes. KRS § 139.531(1)(a).
Lifetime Breeding Rights Generally subject?
Yes. See Calumet Farm, Inc. v. Revenue Cabinet, 793 S.W.2d 830 (Ky. Ct. App. 1990).
Racehorses/Showhorses
Generally subject?Yes.
Exceptions
The temporary use of horses in the state for purposes of racing, exhibiting, or performing is exempt. KRS § 139.531(2)(f).
Other
Credit Against Use Tax Leasing
Re-sales
Yes. KRS § 139.510.
Treated as sale. KRS 139.200.
Holding horses for resale is exempt, so long as the horses are not used before resale. KRS § 139.270; 139.290.
Equine Sales & Use Tax Review | 19
Kentucky
Notes and Comments
1.
Stoner Creek Stud, Inc. v. Revenue Cabinet Commonwealth of Kentucky, 746 S.W.2d 73 (Ct. App. Ky. 1988).
This case arose from audit of taxpayer and subsequent appeal from the Board of Tax Appeals which held that the feed and machinery used in a horse business
were not exempt from the application of sales tax and that use tax was due on hay purchased out of state. Board of Tax Appeals decision was affirmed by the
Court of Appeals.
Relevant statutes were Kentucky Revised Statutes 139.200, 139.310, 139.480(7) and (9) and Regulations 103 KAR 30:130(1).
The Court held that since horses were not livestock as set forth in the statute (which referred to “human consumption”) and since feed was not “tangible
personal property to be used in manufacturing or industrial processing” of finished products for resale, that taxpayers’ arguments failed. The Court indicated
that horses are bred and raised, not manufactured and processed and “Happily, the legendary esteem in which Kentuckians have always held horseflesh has
never extended to the dinner table.” Similarly, the argument for the machinery failed, based on the Court’s interpretation of the definition of “livestock” under
KRS 139.480.
Comment: This issue of sales tax on feed etc. in horse industry is at the forefront of objectives for KEEP (Kentucky Equine Education Project) which seeks to modify
this tax so that horse farmers are treated similarly to cattle and other livestock which do not have to pay sales tax on feed etc. For further information, see
www.horsework.com.
2.
Calumet Farm, Inc. v. Revenue Cabinet, Commonwealth of Kentucky, 793 S.W.2d 830 (Ct. App. Ky. 1990).
This case arose from audit of taxpayer and subsequent appeal from the Board of Tax Appeals. Court held that lifetime breeding right in stallion (ALYDAR) was
not a tax-exempt interest in horse but rather, a fee paid for breeding of stallion and fell within statute taxing fees paid for breeding of stallion.
Relevant statute was Kentucky Revised Statutes 139.531.
3.
Commonwealth of Kentucky, Revenue Cabinet v. Kenington Sales, Inc. (Ct. App. Ky. 1992).
Case arose from audit of taxpayer which was a thoroughbred sales company that had subsequently changed ownership.
Relevant statutes were Kentucky Revised Statutes 139.531 dealing with sales of yearlings to out of state buyers.
Importance of this case is to point out the necessity to document out of state sales. For forms used by current sales companies, see for example:
www.fasigtipton.com/media/ee/docs/KENTUCKY_SALES_AND_USE_TAX.pdf
20 | Equine Sales & Use Tax Review
Louisiana
Use Tax 4% Rate (up to 11% including local taxes)
Mares
Racehorses
Generally subject?
Taxable. La. Rev. Stat. Ann. Sec. 47:302(A)(2).
Generally subject?
Exceptions
Taxable. La. Rev. Stat. Ann. Sec. 47:302(A)(2).
None.
Exceptions
None noted.
Re-seller (Pinhooker)
Exempt with resale certificate. La. Rev. Stat.
Ann. Sec. 47:301(10)(a); La. Rev. Bulletin No.
09-015, 06/23/09.
Stallions
Generally subject?
Taxable. La. Rev. Stat. Ann. Sec. 47:302(A)(2).
Exceptions
None.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of
intangible property - no authority. La. Rev.
Stat. Ann. Sec. 47:301(16)(a).
Exceptions
N/A
Breeding Rights
Generally subject?
Exceptions
Probably a non-taxable service or sale of
intangible property -- no authority. Only
enumerated services are subject to tax and
stud fees are not listed in the Louisiana
statutes as taxable. La. Rev. Stat. Ann. Sec.
47:302(C).
Claiming
Generally subject?
No. A tax exemption applies to race horses
sold through entry in claiming race meets
held in Louisiana, whether or not the horse
claimed was owned by the original breeder.
L.R.S. Sec. 47:305(A)(2).
Exceptions
N/A
Re-seller (Pinhooker)
Exempt with resale certificate. La. Rev. Stat.
Ann. Sec. 47:301(10)(a); La. Rev. Bulletin No.
09-015, 06/23/09.
Other
Credit Against Use Tax
Yes. A credit is allowed against the
Louisiana use tax only in an amount equal
to the comparable state tax rate paid to
the other state, applied to the value taxed
under Louisiana law. La. Rev. Stat. Ann. Sec.
47:303(A)(3)(a).
Leasing
Treated as a sale. La. Rev. Stat. Ann. Sec.
47:302(B).
N/A
Equine Sales & Use Tax Review | 21
Louisiana
Sales Tax 4% State Rate (up to 11% including local taxes)
Mares
Racehorses
Generally subject?
Yes. La. Rev. Stat. Ann. Sec. 47:302(A)(1)
Generally subject?
Yes. La. Rev. Stat. Ann. Sec. 47:302(A)(1)
Exceptions
None noted.
Exceptions
None noted.
Shipping out of state
within a short time-frame
Property purchased for exclusive use
outside the state is exempt, if first use is
outside the state. La. Rev. Stat. Ann. Sec.
47:305.10.
Re-seller (Pinhooker)
Exempt with resale certificate. La. Rev. Stat.
Ann. Sec. 47:301(10)(a); La. Rev. Bulletin No.
09-015, 06/23/09.
Sales directly by
the breeder
Yes. La. Rev. Stat. Ann. Sec. 47:301(5)(a)
Stallions
Generally subject?
Yes. La. Rev. Stat. Ann. Sec. 47:302(A)(1)
Exceptions
None noted.
Stallion Shares
Probably treated the same as stallions - no authority.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property no authority. Only enumerated services are subject to tax, and
stud fees are not listed in the Louisiana statutes as taxable. La.
Rev. Stat. Ann. Sec. 47:302(C).
Sales at auction
Yes. all auctioneers must register as dealers
and are responsible for the collection of the
tax on items sold by them. La. Rev. Stat. Ann.
Sec. 47:303(C).
Exceptions
N/A
By occasional sale
No. An isolated or occasional sale of
tangible personal property by a person not
engaged in such business is exempt, except
for the sale of motor vehicles. La. Rev. Stat.
Ann. Sec. 47:301(10)(c)(II)(bb).
Lifetime Breeding Rights
Generally subject?
Exceptions
22 | Equine Sales & Use Tax Review
Probably a non-taxable service or sale of intangible property -no authority. Only enumerated services are subject to tax and
stud fees are not listed in the Louisiana statutes as taxable. La.
Rev. Stat. Ann. Sec. 47:302(C).
N/A
Claiming
Generally subject?
No. A tax exemption applies to race horses
sold through entry in claiming race meets
held in Louisiana, whether or not the horse
claimed was owned by the original breeder.
L.R.S. Sec. 47:305(A)(2).
Maryland
Sales Tax — 6% State Rate
Mares
Generally subject?
Exceptions
Yes. Md. Code Ann. Tax-Gen § 11-102 & 201.
Horses purchased for breeding purposes only are exempt. Md. Code Ann. Tax-Gen § 11-201; Van Clief v. Comptroller, 126 A.2d 865
(Md. 1956) & in Business Tax Tip #11.
Stallions
Generally subject?
Exceptions
Stallion Shares
Yes. Md. Code Ann. Tax-Gen § 11-102 & 201.
Horses purchased for breeding purposes only are exempt. Md. Code Ann. Tax-Gen § 11-201; Van Clief v. Comptroller, 126 A.2d 865
(Md. 1956) & in Business Tax Tip #11.
Probably treated the same as stallions - no authority.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property - no authority.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property - no authority.
Racehorses/Showhorses
Generally subject?
Yes. Md. Code Ann. Tax-Gen § 11-102 & 201.
Claiming
Generally subject?
Yes. Md. Code Ann. Tax-Gen § 11-201.
Other
Shipping out of state Re-sales
Occasional sales
Sales directly by the breeder
Sales at auction
Leasing
Nonresident/non-commercially domiciled purchaser must take possession outside state to be exempt. Md. Code Regs. 03.06.01.25(2).
Exempt with resale certificate. Md. Code Ann. Tax-Gen. § 11-408.
Exempt if under $1,000 and the sale is not made through an auctioneer or dealer. Md. Code Ann. Tax-Gen § 11-209.
No exemptions noted.
No exemptions noted.
Taxed as a sale. Md. Code Ann. Tax-Gen Sec. 11-101(g); Md. Code Regs. 03.06.01.28(A)).
Equine Sales & Use Tax Review | 23
Maryland
Use Tax — 6% State Rate
Mares
Generally subject?
Exceptions
Yes. Md. Code Ann. Tax-Gen § 11-102 & 201.
Horses used for breeding purposes only are exempt. Md. Code Ann. Tax-Gen § 11-201; Van Clief v. Comptroller, 126 A.2d 865
(Md. 1956) & in Business Tax Tip #11.
Stallions
Generally subject?
Exceptions
Yes. Md. Code Ann. Tax-Gen § 11-101 & 201.
Horses used for breeding purposes only are exempt. Md. Code Ann. Tax-Gen § 11-201; Van Clief v. Comptroller, 126 A.2d 865
(Md. 1956) & in Business Tax Tip #11.
Stud Fees
Generally subject?
Probably a non-taxable service or use of intangible property — no authority.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or use of intangible property — no authority.
Racehorses/Showhorses
Generally subject?
Yes. Md. Code Ann. Tax-Gen § 11-102 & 201.
Other
Credit Against Use Tax Leasing
Re-sales
24 | Equine Sales & Use Tax Review
Yes. Md. Code Ann. Tax-Gen. § 11-221(c)(1).
Taxed as a sale. Md. Code Ann. Tax-Gen Sec. 11-101(g); Md. Code Regs. 03.06.01.28(A)).
Exempt. Md. Code Ann. Tax-Gen. § 11-408.
Maryland
Notes and Comments
1.
Van Clief v. Comptroller of State of Maryland, 211 Md. 191, 126 A.2d. 865 (Ct. App. Md. 1956).
Court held that a broodmare which was formerly a race mare but now producing offspring was livestock “used for agricultural purposes,” and therefore was
exempt from sales tax. Construction of statute and definition of “agricultural purposes” were both at issue.
Relevant statute was Code 1951, Article 81, Section 322 (Exemptions) subsection (h). Court relied on other jurisdictions to holding that “the weight of authority
in other jurisdictions is that agriculture includes the rearing, feeding and management of horses.”
Equine Sales & Use Tax Review | 25
New Jersey
Sales Tax — 7% State Rate
Mares
Generally subject?
Exceptions
Can buyer take possession
in the state?:
Yes. N.J. Admin. Code § 18:24-28.2.
Exempt if purchased for breeding purposes. N.J. Admin. Code § 18:24-19.5(a).
No. N.J. Admin. Code § 18:24-28.2.
Stallions
Generally subject?
Exceptions
Stallion Shares
Yes. N.J. Admin. Code § 18:24-28.2.
Exempt if purchased for breeding purposes. N.J. Admin. Code § 18:24-19.5(a).
Syndication of a horse is considered a sale of the horse and is subject to the sales tax under 18:24-28.9(a) unless the horse is used
exclusively for breeding purposes.
Stud Fees
Generally subject?
No. New Jersey Division of Taxation March/April 1989 State Tax News found stud fees to be an exempt farming input.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property - no authority.
Racehorses/Showhorses
Generally subject?
Yes. N.J. Admin. Code § 18:24-28.2(a).
Claiming
Generally subject?
Yes. N.J. Admin. Code § 18:24-28.3.
Other
Shipping out of state Nonresident/non-commercially domiciled purchaser must take
possession outside of state to be exempt. N.J. Admin. Code
§ 18:24-28.2.
Re-sales
Exempt with resale certificate. N.J. Admin. Code § 54:32B-2(e)(1).
Occasional sales
Exempt casual sale means an isolated sale of an item of tangible
personal property by a person who is not in the business of
making retail sales of such property. N.J. Admin. Code
§. 54:32B-2(u). Does not apply to claiming races.
Sales directly by the breeder Yes. N.J. Admin. Code § 18:24-28.8(a) provides that a horse that
is raced in the state by the breeder is exempt from the sales and
compensating use tax.
26 | Equine Sales & Use Tax Review
Sales at auction
No exemption for sale at auction. N.J. Admin. Code § 18:24-28.2
Leasing
N.J. Stat. § 54:32B-2(e)).
New Jersey
Use Tax — 7% State Rate
Mares
Generally subject?
Exceptions
Yes. N.J. Admin. Code § 54:32B-6.
Exempt if used exclusively for breeding purposes. N.J. Admin. Code § 18:24-19.5(a).
Stallions
Generally subject?
Stallion Syndicates
Yes. N.J. Admin. Code §. 54:32B-6.
N.J. Admin. Code § 18:24-28.9 provides that if a horse, not used exclusively for breeding purposes, is syndicated outside of NJ and subsequently is
used in NJ, the syndicate will be subject to a compensating use tax if it met the resident requirements of N.J. Admin. Code § 18:24-28.5 at the time
of syndication. The residence is that of the syndicate and not of its individual members.
Exceptions
Exempt if used exclusively for breeding purposes. N.J. Admin. Code § 18:24-19.5(a).
Stud Fees
Generally subject?
No. New Jersey Division of Taxation March/April 1989 State Tax News found stud fees to be an exempt farming input.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property - no authority.
Racehorses/Showhorses
Generally subject?
Exceptions
Yes. N.J. Admin. Code § 18:24-28.4(a).
Yes. N.J. Admin. Code § 18:24-28.4(a) provides that the compensating use tax will not be imposed on the use of a race horse within this State if the
horse was purchased by the user while a nonresident/non-commercial domicile of this State.
Other
Credit Against Use Tax Leasing
Re-sales
Yes. N.J. Admin. Code § 18:24-28.4(b).
Same treatment as a sale. N.J. Admin. Code § 18:24-32.7.
Exempt. N.J. Admin. Code § 54:32B-2(e)(1).
Equine Sales & Use Tax Review | 27
New York
Sales Tax — 4% State Rate (up to 8.875% depending on local surtaxes)
Mares
Generally subject?
Exceptions
Can buyer take possession
in the state?:
Yes. NY Reg. Sec. 527.14(a).
Exempt if purchased for breeding. NY Reg. Sec. 527.14(c)(1)(ii).
Exempt to non-resident/non-commercially domiciled purchaser if not delivered within NY. NY Reg Sec 527.14(f).
Stallions
Generally subject?
Exceptions
Stallion Shares
Yes. NY Reg. Sec. 527.14(a).
Exempt if purchased for breeding purposes NY Reg. Sec. 527.14(c)(1)(ii).
Syndication is considered a sale of the horse and is subject to sales tax unless the horse is purchased exclusively for breeding purposes; taxability
conditioned upon review of syndication agreement. NY Reg Sec 527.14(c)(ii) and (vii).
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property — no authority.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property — no authority.
Racehorses/Showhorses
Generally subject?
Yes, unless a registered racehorse to be raced in
pari-mutuel race. N.Y. TAX LAW 28 § 1115(a)(29).
Claiming
Generally subject?
28 | Equine Sales & Use Tax Review
Yes, tax due on portion of claiming price greater
than any prior claiming price paid in NY during
the same calendar year. N.Y. TAX LAW 28
§ 1111(g); BUT, exempt if registered for parimutuel racing. N.Y. TAX LAW 28 § 1115(a)(29).
Other
Shipping out of state Nontaxable if delivered outside NY before
purchaser is deemed to have taken possession. NY Reg Sec. 527(14)(f)(1).
Re-sales
Resale purchases are exempt from sales and
use tax. NY Tax Law 28 § 1105.
Occasional sales
Exempt if under $600 per year from home.
NY Tax Law 28 § 1115(a)(18).
Sales directly by the breeder
No exemptions noted.
Sales at auction
No exemptions noted.
Leasing
Taxed as a sale. Sec. 1101(b)(5), Tax Law;
Sec. 1110, Tax Law; Reg. Sec. 526.7.
New York
Use Tax — 4% State Rate (up to 8.875% depending on local surtaxes)
Mares
Generally subject?
Exceptions
Yes. NY Reg. Sec. 527.14(a).
Exempt if used for breeding purposes. NY Reg. Sec. 527.14(c)(1)(ii).
Stallions
Generally subject?
Exceptions
Yes. NY Reg. Sec. 527.14(a).
Exempt if used for breeding. NY Reg. Sec. 527.14(c)(1)(ii).
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property — no authority.
Lifetime Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property — no authority.
Racehorses/Showhorses
Generally subject?
Yes. NY Reg. Sec. 527.14(a).
Exceptions
Exempt if eligible to be registered for pari-mutuel racing. NY TAX LAW 28 § 1115(a)(29). Capped at $100,000 of price/value per horse.
527.14(d)(iii)(b).
Other
Credit Against Use Tax Leasing
Residents may claim credit for other state/local tax paid; Credit not to exceed NY calculated tax; Only available if state that tax was paid allows credit
same credit for NY taxes paid. NY Tax Law 28 Sect. 1118(7)(a).
Taxed as a sale. Sec. 1101(b)(5), Tax Law; Sec. 1110, Tax Law; Reg. Sec. 526.7.
Re-sales
Resale purchases are exempt from sales and use tax. NY Tax Law 28 § 1105.
Equine Sales & Use Tax Review | 29
North Carolina
Sales Tax 4.75% Rate (Up to 7.5% depending on local surtaxes; see “Other”)
Mares
Generally subject? Yes (unless (i) horse farm is seller and isn’t primarily a retailer
or (ii) occasional sale (see below)). N.C. Gen. Stat.
§ 105-164.13(4b).
Stallions
Other
Leasing
The sales tax is imposed on the gross receipts derived from the
lease or rental of tangible personal property. N.C. Gen. Stat. §
105-164.4(a)(2).
Occasional sales
Occasional or casual sales of horses owned for personal use,
not made in the regular or ordinary course of business, are not
subject to sales or use tax if the seller does not hold himself or
herself out as engaged in business. N.C. Gen. Stat. §105-164.3(1l).
Generally subject?
Generally subject: yes (unless (i) horse farm is seller and
isn’t primarily a retailer or (ii) occasional sale (see below)).
N.C. Gen. Stat. § 105-164.13(4b).
Stallion Shares
Should be same treatment as Stallions.
Horses delivered
out of state
Occasional or casual sales of horses owned for personal use,
not made in the regular or ordinary course of business, are not
subject to sales or use tax if the seller does not hold himself or
herself out as engaged in business. N.C. Gen. Stat. §105-164.3(1l).
Generally subject?
Probably not.
Racehorses
Probably a non-taxable service or sale of intangible
property. Services charges should be separately stated from
tangible personal property sales price to avoid sales tax on
services. N.C. Gen. Stat. §105-164.4. No specific authority.
Generally Subject? Yes. North Carolina sales and use division
takes position that racehorse owners are “doing business” and
therefore don’t qualify for the occasional sales exemption.
Exceptions
N/A
Stud Fees
Lifetime Breeding Rights Generally subject?
Probably not.
property.
property.
Probably a non-taxable service or sale of intangible
Exceptions
N/A
30 | Equine Sales & Use Tax Review
Probably a non-taxable service or sale of intangible
N.C. Gen. Stat. §105-164.4. No specific authority.
Similarly, racehorses cannot be said to be products of farms
once having already been sold by a farm, so the § 105-164.13(4b)
exemption is typically unavailable for racehorses.
Purchases for re-sale
(Pinhooker)
Sales for resale are exempt from sales and use tax as wholesale
sales. N.C. Gen. Stat. §105-164.3(52).
Additional local sales
and use taxes
Effective October 1, 2014, the additional local rate is 2% in all
counties except Alexander, Buncombe, Cabarrus, Catawba,
Cumberland, Davidson, Duplin, Edgecombe, Greene, Halifax,
Harnett, Haywood, Hertford, Lee, Martin, Montgomery, New
Hanover, Onslow, Pitt, Randolph, Robeson, Rowan, Sampson,
Surry, and Wilkes where the county rate is 2.25%. However, the
local rate in Mecklenburg County is 2.5%; and 2.75% in Durham
and Orange Counties as a result of the additional transportation
tax.
Consequently, effective October 1, 2014, the combined state and
local rate is 6.75% in 72 counties; 7% in Alexander, Buncombe,
Cabarrus, Catawba, Cumberland, Davidson, Duplin, Edgecombe,
Greene, Halifax, Harnett, Haywood, Hertford, Lee, Martin,
Montgomery, New Hanover, Onslow, Pitt, Randolph, Robeson,
Rowan, Sampson, Surry, and Wilkes; 7.25% in Mecklenburg
County; and 7.5% in Durham and Orange Counties.
North Carolina
Use Tax 4.75% Rate (Up to 7.5% depending on local surtaxes)
Mares
Generally subject?
Generally subject: yes (unless horse farm is seller and isn’t primarily a retailer). N.C. Gen. Stat. § 105-164.13(4b).
Same exemptions as sales tax pursuant to N.C. Gen. Stat. § 105-164.6(a)
Stallions
Generally subject?
Generally subject: yes (unless horse farm is seller and isn’t primarily a retailer). N.C. Gen. Stat. § 105-164.13(4b).
Same exemptions as sales tax pursuant to N.C. Gen. Stat. § 105-164.6(a).
Stallion Shares
Should be same treatment as Stallions.
Stud Fees
Generally subject?
Probably not. If exemption exists for sales tax, would also apply for use tax. N.C. Gen. Stat. § 105-164.6(a).
Probably a non-taxable service or sale of intangible property. Services charges should be separately stated from tangible personal property sales
price to avoid sales tax on services. N.C. Gen. Stat. §105-164.4. No specific authority.
Exceptions
N/A
Lifetime Breeding Rights Generally subject?
Probably not. If exemption exists for sales tax, would also apply for use tax. N.C. Gen. Stat. § 105-164.6(a).
Probably a non-taxable service or sale of intangible property. N.C. Gen. Stat. §105-164.4. No specific authority.
Exceptions
N/A
Other
Credit Against Use Tax Yes. N.C. Gen. Stat. § 105-164.6(c)
Equine Sales & Use Tax Review | 31
Ohio
Racehorses
Sales Tax — 5.5% State Rate
Mares
Generally subject?
Yes. Ohio Rev. Code §5739.02.
Exceptions
Exempt if used for agricultural purposes. Ohio Rev. Code § 5739.02(B)(42)(n).
Compare Gochneaur v. Kosydar, 346 N.E.2d 320 (Ohio 1976) (horses used for breeding
found to be used for agricultural purpose) with Red Fox Stables, Inc. v. Porterfield, 277
N.E.2d 433 (Ohio 1972) (riding horses found not to be used for agricultural purpose).
Livestock exemption applies to animals used for “agricultural purposes,” although
the definition of “livestock” excludes “animals for use in laboratories or for
exhibition, or other animals not commonly raised for food or food production.
Ohio Rev. Code § 5739.01(OO).
Can buyer take possession
in the state?
Nonresident purchaser must take possession out of state to qualify as interstate
commerce. Ohio Admin. Code § 5703-9-39.
Stallions
Generally subject?
Yes. Ohio Rev. Code §5739.02.
Exceptions
Exempt if used for agricultural purposes. Ohio Rev. Code § 5739.02(B)(42)(n).
Compare Gochneaur v. Kosydar, 346 N.E.2d 320 (Ohio 1976) with Red Fox Stables, Inc.
v. Porterfield, 277 N.E.2d 433 (Ohio 1972). Livestock exemption applies to animals
used for “agricultural purposes,” although the definition of “livestock” excludes
“animals for use in laboratories or for exhibition, or other animals not commonly
raised for food or food production. Ohio Rev. Code § 5739.01(OO).
Stallion Shares
Likely same treatment as stallions.
Exceptions
No direct authority. Probably exempt as a non-taxable service or sale of intangible
property. Unless otherwise provided, services are exempt. Ohio Rev. Code
§ 5739.01(B).
N/A
Lifetime Breeding Rights Generally subject?
Exceptions
32 | Equine Sales & Use Tax Review
No direct authority. Probably exempt as a non-taxable service or sale of intangible
property. Unless otherwise provided, services are exempt. Ohio Rev. Code
§ 5739.01(B)
N/A
Yes. Ohio Rev. Code §5739.02.
Exceptions
Exempt if used for agricultural purposes. Ohio Rev. Code
§ 5739.02(B)(42)(n). Compare Gochneaur v. Kosydar,
346 N.E.2d 320 (Ohio 1976) with Red Fox Stables, Inc. v.
Porterfield, 277 N.E.2d 433 (Ohio 1972). Livestock
exemption applies to animals used for “agricultural
purposes,” although the definition of “livestock” excludes
“animals for use in laboratories or for exhibition, or other
animals not commonly raised for food or food production.
Ohio Rev. Code § 5739.01(OO).
Shipping out of state within
a short time-frame
Re-seller (Pinhooker)
When an item is sold in Ohio to be delivered out of state,
it is treated as interstate commerce and sales tax does not
apply. Ohio Admin. Code § 5703-9-39.
Sales tax does not apply to resellers. Ohio Rev. Code
§ 5739.01(E).
Sales directly by the breeder
Exempt if used for agricultural purposes. Ohio Rev. Code
§ 5739.02(B)(42)(n). Compare Gochneaur v. Kosydar,
346 N.E.2d 320 (Ohio 1976) with Red Fox Stables, Inc. v.
Porterfield, 277 N.E.2d 433 (Ohio 1972). Livestock
exemption applies to animals used for “agricultural
purposes,” although the definition of “livestock” excludes
“animals for use in laboratories or for exhibition, or other
animals not commonly raised for food or food production.
Ohio Rev. Code § 5739.01(OO).
Sales at auction
By occasional sale
Stud Fees
Generally subject?
Generally subject?
Generally, yes. Auctioneer is not responsible for collecting
tax when transaction is casual sale of items acquired for
non-business use unless sale location is auctioneer’s
permanent place of business, which means that auctioneer
has conducted more than two auctions there during the
year. Ohio Admin. Code 5703-9-30.
Casual sales exempt. Ohio Rev. Code § 5739.02(8).
Casual sale occurs when someone purchases an item for
their own personal use (as opposed to business purposes).
Ohio Rev. Code § 5739.01(L).
Claiming
Generally subject?
Exceptions
Shipping out of state
within a short timeframe
Yes, unless purchased for agricultural purpose. Ohio Rev.
Code § 5739.02(B)(42)(n); Ohio Rev. Code § 5739.01(OO).
N/A
When an item is sold in Ohio to be delivered out of state,
it is in interstate commerce and sales tax does not apply.
Ohio Admin. Code § 5703-9-39.
Ohio
Use Tax — 5.5% State Rate
Mares
Generally subject?
Yes. Ohio Rev. Code § 5741.02(C)
Exceptions
Exempt if used for agricultural purposes. Ohio Rev. Code § 5739.02(B)(42)(n).
Compare Gochneaur v. Kosydar, 346 N.E.2d 320 (Ohio 1976) with Red Fox Stables, Inc.
v. Porterfield, 277 N.E.2d 433 (Ohio 1972). Livestock exemption applies to animals
used for “agricultural purposes,” although the definition of “livestock” excludes
“animals for use in laboratories or for exhibition, or other animals not commonly
raised for food or food production. Ohio Rev. Code § 5739.01(OO). Ohio has the
same exemptions for use tax as for sales tax. Ohio Rev. Code § 5741.02(C).
Racehorses
Generally subject?
Yes. Ohio Rev. Code §5741.02(C)
Exceptions
Exempt if used for agricultural purposes. Ohio Rev.
Code § 5739.02(B)(42)(n). Compare Gochneaur v.
Kosydar, 346 N.E.2d 320 (Ohio 1976) with Red Fox
Stables, Inc. v. Porterfield, 277 N.E.2d 433 (Ohio 1972).
Livestock exemption applies to animals used for
“agricultural purposes,” although the definition of
“livestock” excludes “animals for use in laboratories
or for exhibition, or other animals not commonly
raised for food or food production. Ohio Rev. Code §
5739.01(OO). Ohio has the same exemptions for use
tax as for sales tax. Ohio Rev. Code § 5741.02(C).
Re-seller (Pinhooker)
Use tax does not apply to resellers. Ohio Rev. Code
§ 5741.02(C).
Stallions
Generally subject?
Yes. Ohio Rev. Code § 5741.02(C).
Exceptions
Exempt if used for agricultural purposes. Ohio Rev. Code § 5739.02(B)(42)(n).
Compare Gochneaur v. Kosydar, 346 N.E.2d 320 (Ohio 1976) with Red Fox Stables, Inc.
v. Porterfield, 277 N.E.2d 433 (Ohio 1972). Livestock exemption applies to animals
used for “agricultural purposes,” although the definition of “livestock” excludes
“animals for use in laboratories or for exhibition, or other animals not commonly
raised for food or food production. Ohio Rev. Code § 5739.01(OO). Ohio has the
same exemptions for use tax as for sales tax. Ohio Rev. Code § 5741.02(C).
Stud Fees
Generally subject?
Exceptions
No direct authority. Probably exempt as a non-taxable service or sale of
intangible property. Unless otherwise provided, services are exempt.
Ohio Rev. Code § 5739.01(B).
Claiming
Generally subject?
Yes. 35 Ill. Comp. Stat. 105/3.
Exceptions
Exempt if used for agricultural purposes. Ohio Rev.
Code § 5739.02(B)(42)(n). Compare Gochneaur v.
Kosydar, 346 N.E.2d 320 (Ohio 1976) with Red Fox
Stables, Inc. v. Porterfield, 277 N.E.2d 433 (Ohio 1972).
Livestock exemption applies to animals used for
“agricultural purposes,” although the definition of
“livestock” excludes “animals for use in laboratories
or for exhibition, or other animals not commonly
raised for food or food production. Ohio Rev. Code §
5739.01(OO). Ohio has the same exemptions for use
tax as for sales tax. Ohio Rev. Code § 5741.02(C).
Re-seller (Pinhooker)
Use tax does not apply to resellers. Ohio Rev. Code
§ 5741.02(C).
N/A
Breeding Rights Generally subject?
Exceptions
No direct authority. Probably exempt as a non-taxable service or sale of
intangible property. Unless otherwise provided, services are exempt.
Ohio Rev. Code § 5739.01(B).
N/A
Other
Credit Against Use Tax Leasing
Yes – available to extent that sales tax was paid to another jurisdiction.
Ohio Rev. Code § 5741.02(C)(5).
Yes. Ohio Rev. Code § 5741.02(A)(2) provides that use tax applies to leases.
Equine Sales & Use Tax Review | 33
Ohio
Notes and Comments
1.
Gochneaur v. Kosydar, 346 N.E.2d 320 (Ohio 1976).
A trainer/breeder tried to argue that his racehorses were exempt from Ohio’s use tax under the Ohio Rev. Code § 5739.02 agriculture exemption. Using the
definition of “agriculture” in Webster’s dictionary, the court found that the racehorses satisfied the definition of “agriculture” because they were “livestock.”
Ultimately, however, the court ruled in favor of the Tax Commissioner, because the trainer did not properly give notice of appeal.
2.
Red Fox Stables, Inc. v. Porterfield, 277 N.E.2d 433 (Ohio 1972).
Red Fox Stables, which operated a riding academy on a 187-acre tract of land, appealed sales and use taxes imposed on its purchase of horses. The Stable argued
that the transactions at issue constituted exempt agricultural activity. The court disagreed, holding that the activity was not undertaken in furtherance of
agriculture. The court relied heavily on a prior Board of Tax Appeals opinion that defined “agriculture” as “the cultivation of the soil for the purpose of producing
vegetables and fruits and includ[ing] gardening or horticulture, together with the raising and feeding of cattle or stock for sale as a business.” Under this
definition, the court did not consider the purchase of horses for use at a riding academy an “agricultural” use.
3.
Randall Park Jockey Club, Inc. v. Peck, 122 N.E.2d 787 (Ohio 1954).
Taxpayer, a racing association, appealed sales and use taxes imposed on its rental of pari-mutuel machines, which it used to take bets on horse races. The Club
argued that the rental involved installation of the devices, which was a tax-exempt service. The court disagreed, holding that the machines were taxable personal
property that triggered sales and use taxes. The court further explained that the taxes should be imposed on the cost of the rental and not on the price of each
wager ticket sold through the machine.
34 | Equine Sales & Use Tax Review
Notes
Equine Sales & Use Tax Review | 35
Oklahoma
Sales Tax — 4.5% State Rate
Mares
Generally subject?
No. OKLA. STAT. tit. 68 § 1357.7 exempts all sales of horses after January 1, 1989.
Exceptions
N/A
Can buyer take possession
in the state?:
N/A
Stallions
Generally subject?
No. OKLA. STAT. tit. 68 § 1357.7.
Exceptions
N/A
Stallion Shares
Probably nontaxable based on OKLA. STAT. tit. 68 § 1357.7 — no direct authority.
Stud Fees
Generally subject?
Exceptions
Probably not. OKLA. STAT. tit. 68 § 1404(7) provides exception for livestock
(including horses - OKLA. ADMIN. CODE § 710:65-13-15(a)(4)) brought from
out-of-state for breeding purposes. OKLA. ADMIN. CODE § 710:65-13-15(k)(10)
also states that breeding supplies (including semen and storage supplies)
are exempt. Additionally, OKLA. STAT. tit. 68 § 1357.7 may extend to breeding
rights. Or, a non-taxable service. Oklahoma sales tax is imposed only on
those services specifically taxed by statute. OKLA. STAT. tit. 68 § 1354.
Breeding supplies exemption only extends to agricultural use, which does not
include ownership of livestock solely for one’s own use for pleasure riding,
trail riding, performance riding, participation in horse shows, or racing.
OKLA. ADMIN. CODE § 710:65-13-15(c)(5).
Lifetime Breeding Rights Generally subject?
Exceptions
36 | Equine Sales & Use Tax Review
Probably not. OKLA. STAT. tit. 68 § 1404(7) provides exception for livestock
(including horses - OKLA. ADMIN. CODE § 710:65-13-15(a)(4)) brought from
out-of-state for breeding purposes. OKLA. ADMIN. CODE § 710:65-13-15(k)(10)
also states that breeding supplies (including semen and storage supplies)
are exempt. Additionally, OKLA. STAT. tit. 68 § 1357.7 may extend to breeding
rights. Or, a non-taxable service. Oklahoma sales tax is imposed only on
those services specifically taxed by statute. OKLA. STAT. tit. 68 § 1354.
Breeding supplies exemption only extends to agricultural use, which does not
include ownership of livestock solely for one’s own use for pleasure riding,
trail riding, performance riding, participation in horse shows, or racing.
OKLA. ADMIN. CODE § 710:65-13-15(c)(5).
Racehorses
Generally subject?
No. OKLA. STAT. tit. 68 § 1357.7.
Exceptions
N/A
Shipping out of state within
a short time-frame
N/A
Re-seller (Pinhooker)
No. Resellers are exempt under OKLA. STAT.
tit. 68 § 1404(2).
Sales directly by the breeder
No. OKLA. STAT. tit. 68 § 1357.7.
Sales at auction
N/A
By occasional sale
N/A
Claiming
Generally subject?
No. OKLA. STAT. tit. 68 § 1357.7.
Exceptions
Short time frame
N/A
N/A
Oklahoma
Use Tax — 4.5% State Rate
Mares
Generally subject?
Exceptions
No. OKLA. STAT. tit. 68 § 1404(4) provides that all exemptions to Sales Tax also apply to Use Tax. OKLA. STAT. tit. 68 § 1357.7 provides exemption for all horse sales after
January 1, 1989.
N/A
Stallions
Generally subject?
Exceptions
No. OKLA. STAT. tit. 68 § 1404(4) provides that all exemptions to Sales Tax also
apply to Use Tax. OKLA. STAT. tit. 68 § 1357.7 provides exemption for horses.
N/A
Stud Fees
Generally subject?
Exceptions
Probably not. OKLA. STAT. tit. 68 § 1404(7) provides exception for livestock
(including horses - OKLA. ADMIN. CODE § 710:65-13-15(a)(4)) brought from
out-of-state for breeding purposes. OKLA. ADMIN. CODE § 710:65-13-15(k)(10)
also states that breeding supplies (including semen and storage supplies)
are exempt. Additionally, OKLA. STAT. tit. 68 § 1357.7 may extend to breeding
rights. Or, possibly a non-taxable service. Oklahoma sales tax is imposed
only on those services specifically taxed by statute. OKLA. STAT. tit. 68 § 1354.
Breeding supplies exemption only extends to agricultural use, which does
not include ownership of livestock solely for one’s own use for pleasure riding,
trail riding, performance riding, participation in horse shows, or racing.
OKLA. ADMIN. CODE § 710:65-13-15(c)(5).
Breeding Rights Generally subject?
Exceptions
Probably not. OKLA. STAT. tit. 68 § 1404(7) provides exception for livestock
(including horses - OKLA. ADMIN. CODE § 710:65-13-15(a)(4)) brought from
out-of-state for breeding purposes. OKLA. ADMIN. CODE § 710:65-13-15(k)(10)
also states that breeding supplies (including semen and storage supplies)
are exempt. Additionally, OKLA. STAT. tit. 68 § 1357.7 may extend to breeding
rights. Or, possibly a non-taxable service. Oklahoma sales tax is imposed
only on those services specifically taxed by statute. OKLA. STAT. tit. 68 § 1354.
Breeding supplies exemption only extends to agricultural use, which does not
include ownership of livestock solely for one’s own use for pleasure riding,
trail riding, performance riding, participation in horse shows, or racing.
OKLA. ADMIN. CODE § 710:65-13-15(c)(5).
Racehorses
Generally subject?
No. OKLA. STAT. tit. 68 § 1404(4) provides that
all exemptions to Sales Tax also apply to Use Tax.
OKLA. STAT. tit. 68 § 1357.7 provides exemption
for horses.
Exceptions
N/A
Re-seller (Pinhooker)
No. Resellers are exempt under OKLA. STAT.
tit. 68 § 1404(2). And OKLA. STAT. tit. 68 § 1404(4)
provides that all exemptions to Sales Tax also apply
to Use Tax.
Claiming
Generally subject?
No. OKLA. STAT. tit. 68 § 1404(4) provides that all
exemptions to Sales Tax also apply to Use Tax.
OKLA. STAT. tit. 68 § 1357.7 provides exemption
for horses.
Exceptions
N/A
Re-seller (Pinhooker)
No. Resellers are exempt under OKLA. STAT.
tit. 68 § 1404(2). And OKLA. STAT. tit. 68 § 1404(4)
provides that all exemptions to Sales Tax also
apply to Use Tax.
Other
Credit Against Use Tax Yes. OKLA. STAT. tit. 68 § 1404(3).
Leasing
Leasing is treated same as sales — horses would
be exempt. OKLA. STAT. tit. 68 § 1401(6).
Equine Sales & Use Tax Review | 37
Pennsylvania
Sales Tax — 6% State Rate
Mares
Generally subject?
Exceptions:
Yes. 72 Pa. Stat. § 7202(a).
The purchase of tangible property by a person engaged in the business of farming is exempt if used predominantly in the farming operation.
Reg. Section 32.33(a). The propagation and raising of horses to be used exclusively for certain thoroughbred and harness racing activities qualifies
as farming. Reg. Section 60.21(b)(3). Other types of horses are subject.
Stallions
Generally subject?
Exceptions:
Stallion Shares
Yes. 72 Pa. Stat. § 7202(a).
The purchase of tangible property by a person engaged in the business of farming is exempt if used predominantly in the farming operation.
Reg. Section 32.33(a). The propagation and raising of horses to be used exclusively for commercial racing activities qualifies as farming.
Reg. Section 60.21(b)(3). Other types of horses are subject.
Subject. See case commentary below. But see exception relating to propagation of thoroughbred and harness racehorses.
Stud Fees
Generally subject?
Stud fees are generally subject. See commentary below. Stud fees relating to the propagation and raising of horses to be used exclusively for
commercial racing activities qualify for the farming exemption. Reg. Section 60.21(b)(3) .
Lifetime Breeding Rights Generally subject?
Probably same as stud fees. No authority.
Racehorses/Showhorses
Generally subject?
Yes and No. Purchases of horses to be used
exclusively in certain thoroughbred and harness
racing activities are exempt. Reg. Section 60.21(b)(1).
Other horses are generally subject.
Claiming
Generally subject?
`
38 | Equine Sales & Use Tax Review
No. Claiming races are also governed under
Reg. Sec. 60.21. An example within this regulation
states that a horse purchased at a claiming race was
not subject to sales and use tax.
Other
Shipping out of state Nonresident/non-commercially domiciled
purchaser must take possession outside state
to be exempt. Reg. Sec. 31.3(25).
Re-sales
Sale of property for purposes of resale is not
subject to sales tax. 72 Pa. Stat. § 7201(k).
Occasional sales
Exempt if not more than three sales in a calendar
year and not sold from a location at which other
businesses are making similar sales of the same
taxable property. Reg. Sec. 32.1.
Sales directly by the breeder
No exemptions noted.
Sales at auction
No exemptions noted.
Leasing
Taxed as a sale. Reg. Sec. 31.1 (1).
Pennsylvania
Use Tax — 6% State Rate
Mares
Generally subject?
Exceptions
Yes. 72 Pa. Stat. § 7202(b).
The use of tangible property by a person engaged in the business of farming is exempt if used predominantly in the farming operation.
Reg. Section 32.33(a). The propagation and raising of horses to be used exclusively for commercial racing activities qualifies as farming.
Reg. Section 60.21(b)(3). Other types of horses are subject.
Stallions
Generally subject?
Exceptions
Yes. 72 Pa. Stat. § 7202(b).
The use of tangible property by a person engaged in the business of farming is exempt if used predominantly in the farming operation.
Reg. Section 32.33(a). The propagation and raising of horses to be used exclusively for commercial racing activities qualifies as farming.
Reg. Section 60.21(b)(3). Other types of horses are subject.
Stud Fees
Generally subject?
Stud fees are generally subject. See commentary below. Stud fees relating to the propagation and raising of horses to be used exclusively
for commercial racing activities qualifies as farming. Reg. Section 60.21(b)(3).
Lifetime Breeding Rights Generally subject?
Probably same as stud fees. No authority.
Racehorses/Showhorses
Generally subject?
Yes and No. Purchases of horses to be used exclusively in commercial racing activities are exempt. Reg. Section 60.21(b)(1).
Other horses are generally subject.
Other
Credit Against Use Tax Leasing
Re-sale
Yes. Reg. Sec. 31.7(b).
Taxed as a sale. Reg. Sec. 31.1 (1).
Exempt. 72 Pa. Stat. § 7201(k).
Equine Sales & Use Tax Review | 39
Pennsylvania
Notes and Comments
1.
Commonwealth v. Hanover Shoe Farms, Inc. (27 Pa. D. & C2d 366, 1962 WL 6811 (Pa.Com.Pl., 1961))
Appeal from Board of Finance and Revenue to the Court of Common Pleas of Pennsylvania.
Relevant statute was Selective Sales and Use Tax Act (72 P.S. 3403-2). The Sales and Use Tax Act used the words “farming” and “agriculture” without defining
them.
The Court held that the sale of semen for artificial insemination was a retail sale under the statute. Court found that raising of standardbred horses was not
“farming” or “agriculture” and therefore no exemption was permitted, holding that seminal fluid was tangible personal property.
In fact, the Court stated that “Standardbred horses fill no basic need of man. It is common knowledge that the breeding and raising of standardbred horses is
one of producing a luxury product and not a product ordinarily considered necessary to man’s needs: standardbred horses have no relation to the land except
to occupy it and the fact that they produce waste used to fertilize the soil is the nature of all living creatures.”
2.
Commonwealth v. Wetzel, 435 Pa. 468, 257 A.2d 538 (SCt. Pa. 1969).
The Court held that the sale of stud fee services for breeding of standardbred horses later sold in the market was not exempt from sales tax under sale for
resale exemption. Taxpayer Wetzel sent mares to Hempt Farms for artificial insemination. Taxpayer’s argument was that “semen provided by Hempt Farms
stallion, in uniting with the ovum of appellant’s mare to produce a foal, represents personal property physically incorporated into other personal property to
be sold in the regular course of business.”
The Court also noted that since Hanover Shoe prohibits the characterization of artificial insemination and standardbred horse breeding as agricultural or
farming, the taxpayer attempted to rely on the more general provisions of the statute for assembly operations. A similar case was argued by the mink breeders
of Pennsylvania and failed. A subsequent Tax Act had been adopted in Pennsylvania since Hanover Shoe and the mink case, but did not alter the sections at
issue.
3.
Hempt Brothers, Inc. v. Commonwealth, 137 Pa.Cmwlth. 188, 585 A.2d 593 (S.Ct. Pa., 1991).
Court held that the purchase of shares in stallion syndications resulted in acquisition of ownership interests subject to use tax.
Taxpayer attempted to argue, contrary to clear wording of syndication agreement, that the interest was more like a breeding right and was not an
“ownership” right.
40 | Equine Sales & Use Tax Review
Notes
Equine Sales & Use Tax Review | 41
Texas
Sales Tax — 6.25% State Rate
Mares
Generally subject?
No. Texas Tax Code § 151.316(a)(1) (all horses exempt).
ExceptionsN/A
Can buyer take possession
in the state?:N/A
Stallions
Generally subject?
No. Texas Tax Code § 151.316(a)(1) (all horses exempt).
ExceptionsN/A
Stallion Shares
Probably nontaxable based on Texas Tax Code § 151.316(a)(1) — no authority.
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property; also Texas Tax Code § 151.316(a)(1) exempts horses from sales taxation — no authority.
ExceptionsN/A
Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property;
also Texas Tax Code § 151.316(a)(1) exempts horses from sales
taxation — no authority.
ExceptionsN/A
Claiming
Generally subject?
No. Texas Tax Code § 151.316(a)(1) (all horses exempt).
ExceptionsN/A
Short time frameN/A
Racehorses
Generally subject?
No. Texas Tax Code § 151.316(a)(1)
(all horses exempt).
ExceptionsN/A
Shipping out of state within
a short time-frameN/A
Re-seller (Pinhooker)N/A
Sales directly by the breederN/A
Sales at auctionN/A
By occasional saleN/A
42 | Equine Sales & Use Tax Review
Texas
Use Tax — 6.25% State Rate
Mares
Generally subject?
No. Texas Tax Code § 151.316(a)(1) (all horses exempt).
ExceptionsN/A
Stallions
Generally subject?
No. Texas Tax Code § 151.316(a)(1) (all horses exempt).
ExceptionsN/A
Stud Fees
Generally subject?
Probably a non-taxable service or sale of intangible property; also Texas Tax Code § 151.316(a)(1) exempts horses from sales taxation — no authority.
ExceptionsN/A
Breeding Rights Generally subject?
Probably a non-taxable service or sale of intangible property; also Texas Tax Code § 151.316(a)(1) exempts horses from sales taxation — no authority.
ExceptionsN/A
Racehorses
Generally subject?
No. Texas Tax Code § 151.316(a)(1) (all horses exempt).
ExceptionsN/A
Re-seller (Pinhooker)N/A
Claiming
Generally subject?
No. Texas Tax Code § 151.316(a)(1) (all horses exempt).
ExceptionsN/A
Short time frame
N/A
Other
Credit Against Use Tax N/A
Leasing
Same treatment as a sale. Texas Tax Code § 151.005(2).
Equine Sales & Use Tax Review | 43
West Virginia
Sales Tax — 6% State Rate
Mares
Generally subject?
Yes. W. Va. Code § 11-15-3(a); 11-15-8.
Exceptions
Can buyer take possession
in the state?
Exempt if purchased for use in the commercial production
of an agricultural product. W. Va. Code R. § 110-15-9.3.8.
Nonresident purchaser must take possession outside state
to be exempt. Reg. § 110-15-30.3.
Stallions
Generally subject?
Yes. W Va. Code § 11-15-3(a); 11-15-8.
Exceptions
Stallion Shares
Exempt if purchased for use in the commercial production
of an agricultural product. W. Va. Code R. § 110-15-9.3.8.
Probably treated the same as stallions – no authority.
Stud Fees
Generally subject?
Exceptions
Probably no. Since the agricultural production starts with the
“breeding” of livestock, it can be interpreted that breeding fees
would fall under the exemption in W. Va. Code R. § 110-15-9.3.8.
The exemption applies to “commercial production of agricultural
products as a business and not to purchases of use or consumption
for any other purpose.”
Lifetime Breeding Rights Generally subject?
Exceptions
44 | Equine Sales & Use Tax Review
Racehorses
Generally subject?
Yes. W. Va. Code § 11-15-3(a); 11-15-8
Exceptions
Exempt if purchased for use in the commercial
production of an agricultural product.
W. Va. Code R. § 110-15-9.3.8.
Shipping out of state
within a short
time-frame
Nonresident purchaser must take possession
outside state to be exempt. W. Va. Code
R. § 110-15-30.3.
Re-seller (Pinhooker)
Exempt with resale certificate.
W. Va. Code § 11-15-9(a).
Sales directly by
the breeder
Sales of livestock by producer are exempt if
producer is not otherwise engaged of making
retail sales of similar tangible personal property.
W. Va. Code R. § 110-15-9.2.26.
Sales at auction
Exempt if auction is sponsored by breeders
or registry associations or at livestock auction
markets. W. Va. Code R. § 110-15-9.2.27.
By occasional sale
Exempt if four or less sales in 12 months.
W. Va. Code R. § 110-15-2.39.
Claiming
Probably no. Since the agricultural production starts with the
“breeding” of livestock, it can be interpreted that breeding
fees would fall under the exemption in W. Va. Code
R. § 110-15-9.3.8.
The exemption applies to “commercial production of agricultural
products as a business and not to purchases of use or consumption
for any other purpose.”
Generally subject?
Yes. W. Va. Code § 11-15-3(a); 11-15-8.
Exceptions
Exempt if purchased for use in the commercial
production of an agricultural product.
W. Va. Code R. § 110-15-9.3.8.
Shipping out of state
within a short
time-frame
Nonresident purchaser must take possession
outside state to be exempt.
W. Va. Code R. § 110-15-30.3.
West Virginia
Use Tax — 6% State Rate
Mares
Generally subject?
Exceptions
Yes. W. Va. Code § 11-15A-2(d).
Exempt if purchased for use in the commercial production of an agricultural product. W. Va. Code R. § 110-15-9.3.8.
Stallions
Generally subject?
Exceptions
Yes. W. Va. Code § 11-15A-2(d).
Exempt if purchased for use in the commercial production of an agricultural product. W. Va. Code R. § 110-15-9.3.8.
Stud Fees
Generally subject?
Exceptions
Probably no. Since the agricultural production starts with the “breeding” of livestock, it can be interpreted that breeding fees would
fall under the exemption in W. Va. Code R. § 110-15-9.3.8.
The exemption applies to “commercial production of agricultural products as a business and not to purchases of use or consumption
for any other purpose.”
Breeding Rights Generally subject?
Exceptions
Probably no. Since the agricultural production starts with the “breeding” of livestock, it can be interpreted that breeding fees would
fall under the exemption in W. Va. Code R. § 110-15-9.3.8.
The exemption applies to “commercial production of agricultural products as a business and not to purchases of use or consumption
for any other purpose.”
Racehorses
Generally subject?
Exceptions
Yes. W. Va. Code § 11-15A-2(d).
Exempt if purchased for use in the commercial production
of an agricultural product. W. Va. Code R. § 110-15-9.3.8.
Re-seller (Pinhooker)
Exempt with resale certificate. W. Va. Code § 11-15-9(a)(9).
Other
Credit Against Use Tax Leasing
Claiming
Generally subject?
Yes. W. Va. Code § 11-15A-2(d).
Exceptions
Exempt if purchased for use in the
commercial production of an agricultural
product. W. Va. Code R. § 110-15-9.3.8.
Re-seller (Pinhooker)
Exempt with resale certificate.
W. Va. Code § 11-15-9(a)(9).
Yes. W. Va. Code § 11-15A-10a.
Same treatment as a sale. W. Va. Code § 11-15-2(b)(17).
Equine Sales & Use Tax Review | 45
Equine
Industry Group
Located in Kentucky, known for its world-class horse farms,
racing, and sales, our firm has provided accounting, tax, and
business consulting services to the horse industry for over 35
years. Our clients cover a broad spectrum of organizations
involved in the horse industry, from small boarding farms to
large multidepartmental farms involved in boarding, breeding,
selling, and stallion management; from racing stables to a
racetrack; from bloodstock agents to equine veterinary firms;
and from industry associations to equine insurance agencies.
Not all of our clients are based in Kentucky; horse industry
clients from other parts of the country and from outside the
United States also gain comfort from having our industry
specialists work with them.
As a firm, we endeavor to know the business of horses, not just
accounting and tax rules relating to the industry. We accomplish
this in a number of ways, including, most usefully, by working
with our many clients in the industry on their business matters.
We perform a variety of services for our clients involved in
the equine industry and we welcome inquiries, whether
from new participants in the industry who want assistance in
properly structuring and administering their stables or farms
or from longtime industry participants seeking to improve the
performance and administration of their operations.
The unique attributes of the equine industry demand
accounting services with the particular depth of experience
and expertise that Dean Dorton delivers. When equine industry
participants enlist Dean Dorton to provide tax services, they
can be confident they are engaging a firm with in-depth
industry experience and know-how. We are interested in our
clients’ business, know the industry, and can provide a wide
range of valuable services designed to both optimize savings
opportunities and avoid unanticipated problems.
46 | Equine Sales & Use Tax Review
Group Leaders
Doug Dean, CPA
Leigh McKee, CPA
[email protected] / (859) 425-7608
[email protected] / (859) 425-7617
Melissa Hicks, CPA
Jen Shah, CPA
[email protected] / (859) 425-7613
[email protected] / (859) 425-7651
Services
Accounting and Assurance
Tax
•
Developing strategies to use the optimum forms of organization.
•
Reducing exposure to the hobby loss rules.
•
Directly performing many accounting, payroll, and clerical
functions for smaller enterprises.
•
Structuring transactions to avoid or minimize sales and
use taxes.
•
Designing and implementing farm accounting and management
information systems
•
Avoiding or managing the potential impact of the passive
activity loss rules.
•
Performing audit, review, and compilation services on client
financial statements.
•
Using current and deferred trades of horses and farms to avoid
or postpone income taxes.
•
Performing risk assessments and tailed internal audit functions.
•
Developing policies to expense or capitalize costs relating
to depreciable assets which are in compliance with new
tax regulations.
•
Using the involuntary conversion tax rules to defer income taxes
on insurance recoveries related to horse and farm casualties.
•
Estate planning designed to use special-use valuation and
family farm conservation incentives, family limited partnership
strategies, and deferred tax payments.
•
Handling multistate tax issues.
•
Helping foreign owners and breeders to minimize exposure to
U.S. taxes and comply with filing requirements.
•
Developing tax accounting systems to comply, where
required, with rules requiring capitalization of preproductive
period costs.
•
Representing clients with federal and state tax audits.
•
Taking advantage of unique tax depreciation rules.
•
Maximizing the tax benefit of the qualified production activities
deduction.
Business Consulting
•
Developing financial and business plans for farms, breeding
operations, and racing stables.
•
Financial analysis of stallion prospects.
•
Assessing farm accounting and financial management
procedures and practices.
•
Providing litigation support and forensic accounting services.
•
Providing a wide range of technology solutions, e.g., complete
managed services, network design and support, technology
assessments, software consulting, accounting software
solutions, and business application training.
Jen Shah, CPA
Director of Tax Services
Professional Experience
Jen began her public accounting career at a Big 4 accounting firm, where she specialized in individual international tax matters.
She joined Dean Dorton in 2003 and has over thirteen years of experience advising businesses and individual clients on tax and
general business consulting matters. She has worked with a variety of clients in many different industries, but spends much of
her time working with high-net worth individuals and related entities (businesses, trusts and foundations).
Jen currently leads the firm’s equine practice. In addition to working extensively with participants in the equine industry,
Jen advises on general international tax matters. She has worked with many clients in diverse industries, with an additional
concentration on advising software companies with tax matters including a short-term assignment to Geneva, Switzerland.
Jen is often called upon to speak at industry conferences on tax-related topics.
Professional Activities
American Institute of Certified Public Accountants (AICPA)
Kentucky Society of Certified Public Accountants (KYCPA)
Thoroughbred Owners and Breeders Association (TOBA)
Community Involvement
Hospice of the Bluegrass, Executive Committee Member and Treasurer
Women Leading Kentucky, Treasurer
Vision 20/20 Member
Equine Financial Group Member
Horse Country, Inc., Finance Committee Member
Kentucky Equine Education Project, Member
Commerce Lexington, Leadership Lexington Class of 2006 – 2007
University of Kentucky Alumni Association, Lifetime Member
Equine Sales & Use Tax Review | 47
Michael R. Harbold, CPA
Associate Director of Tax Services
Professional Experience
Mike has more than 20 years of experience in providing tax services to Kentucky and Indiana companies, large and small. Mike
has experience with a client base including C corporations, S corporations, partnerships and high net worth individuals. Mike has
assisted companies in the areas of manufacturing, natural resources, healthcare, equine, and retail as well as service providers.
He has consulted with these companies in all areas of tax compliance and planning, with a focus on state and local taxation.
Mike leads the firm’s state and local tax group, which deals with tax compliance and consulting in the areas of income and
franchise tax, sales tax, property tax and incentives and credits, as well as multi-state tax planning and controversy. Mike is a
frequent speaker and author on Kentucky and multi-state tax issues.
Professional Activities
American Institute of Certified Public Accountants
Kentucky Society of Certified Public Accountants, Tax Committee
Greater Louisville, Inc. Tax Committee
Frequent Speaker on Kentucky and Multistate Tax Issues
Regular Contributor to CCH State Income Tax Alert
Community Involvement
American Institute of Certified Public Accountants
Kentucky Society of Certified Public Accountants, Tax Committee
Greater Louisville, Inc. Tax Committee
Frequent Speaker on Kentucky and Multistate Tax Issues
Contributor to Wolters Kluwer CCH State Income Tax Alert
48 | Equine Sales & Use Tax Review
THIS IS AN ADVERTISEMENT. SERVICES MAY BE PROVIDED BY OTHERS.
© 2015. All rights reserved. Photo: ©2009 Shawn McMillen.
View all our publications:
▪ Thoroughbred Business Year in Review
▪ Kentucky Equine Industry Survey
▪ Equine Sales and Use Tax Review
▪ Dean Dorton Quarterly Newsletter
deandorton.com
Laura A. D’Angelo }
Attorney | Horsewoman | (859) 425-1058
For more information contact:
Jen Shah
[email protected]
As equine attorneys, our personal and professional insights help you to
see all sides of the issues facing your industry:
Doug Dean
[email protected]
State and Federal Regulatory counsel
Litigation and Dispute Resolution
Stallion and Performance Horse Syndications
Purchase and Sales of Thoroughbreds and Sport Horses
Horse Farm Real Estate
LLC’s and Partnerships
Equine Tax
Leigh McKee
[email protected]
Melissa Hicks
[email protected]
859.255.2341
106 W. Vine Street
Suite 600
Lexington, KY 40507
502.589.6050
500 W. Jefferson Street
OFFICES
Suite 1400
COLORADO | ILLINOIS | KENTUCKY
Louisville, KY 40202
OHIO | PENNSYLVANIA | WASHINGTON, D.C.
DINSMORE & SHOHL LLP | LEGAL COUNSEL | DINSMORE.COM/EQUINE
LEXINGTON
BUSINESS ADVISORS
CPAs
LEXINGTON FINANCIAL CENTER
CONSULTANTS
250 W. MAIN STREET | SUITE 1400
WEST VIRGINIA
Equine Team
Drawing on our extensive experience working with racetracks, account wagering companies and boarding, showing, training and
breeding operations, as well as trainers and owners, our team brings a thorough knowledge of the equine industry to the table, enabling
them to anticipate challenges and steer our clients toward solutions.
Our team is strongly-rooted in the equine industry, featuring attorneys who have helped clients in a variety of matters, including the
negotiating and drafting of domestic and international simulcast agreements; the formation and structure of racing partnerships
and racing leases; syndication and sale of elite showjumpers, three-day event horses stallions and other bloodstock interests; and the
acquisition and sale of numerous commercial horse farms. We also have assisted clients with account wagering licenses and hearings,
racetrack issues, media contracts, merchandising, import and export matters, and litigation of all types, including racing and United
States Equestrian Federation (USEF) hearings.
Our work extends outside of the racetrack and show ring, as our attorneys are frequent contributors to various publications and
educational forums, including being published in The Blood-Horse, Gaming Law & Economics, Casino Enterprise Management, Casino
Lawyer and Business Lexington, and being quoted in The New York Times, Toronto Globe & Mail, Thoroughbred Times, Lexington HeraldLeader. Our team also features the Chair of the National Equine Law Conference.
Our attorneys’ understanding of the industry not only provides our clients with a unique perspective, but also enables them to weigh
both the short and long-term consequences of each decision. We place a premium on partnering with our clients — working together to
achieve their goals and keep them moving forward.
Featured Experience
Worked with national account wagering company to acquire various state licenses and ensure regulatory compliance in multiple states to allow
for continued operation of multi-million dollar business
Documentation of syndication or sale of stallions, including Kentucky Derby winner BIG BROWN, Breeders’ Cup Classic winners GHOSTZAPPER
and AWESOME AGAIN, and Eclipse Award winner WAR PASS
Advised international gaming companies on U.S. gaming law (civil and criminal), including the Wire Act, Interstate Horseracing Act of 1978
and Unlawful Internet Gambling Enforcement Act, and proposed federal legislation to legalize, tax and regulate various forms of igaming
Assisted client in purchase of interest in thoroughbred racetrack, including handling regulatory and state racing commission licensing issues
for new owner
Drafted rules and regulations for fantasy handicapping tournaments, ensuring compliance with various state and federal laws, including
the Unlawful Internet Gambling Enforcement Act
50 | Equine Sales & Use Tax Review
Negotiated and drafted all major contracts for premier racetrack. Contracts ranged from operational contracts, including condition book
and stall application, to general business contracts, such as food service and on-track veterinary agreements.
Laura D’Angelo
Leveraging her MBA and law degree with extensive experience representing international and domestic clients and a lifetime in the
equine industry, Laura takes a practical, measured approach to find resolutions for her clients. She also has substantial experience
acting as lender’s counsel on equine and commercial secured lending matters.
Working as lender’s counsel, Laura has closed over one billion dollars worth of transactions for clients, including secured transactions,
UCC Article 9 work, asset-based lending and work outs, both in conjunction with and independent of the equine industry. She also
regarded as a leading attorney in Kentucky on LLC formation, law and governance and currently sits on the American Bar Association’s
LLC and Partnership Committee, as well as chairing a drafting committee on LLC formation.
In addition to her business acumen, Laura also has a thorough knowledge of gaming law, enabling her to effectively steer clients
through the myriad of evolving regulations that govern the industry. She previously served as Associate General Counsel for the
Magna Entertainment Corporation and as General Counsel to Gulfstream Park, allowing her to provide clients with the benefits of her
unique perspectives into the operations of racing, gaming and entertainment companies. Her work with leading gaming officials and
companies across the world, enable her to not only stay abreast of new developments and legislation within the gaming industry,
but also to offer proactive insight and counsel to clients to mitigate their risk as they move forward. She is also a member of the
International Masters of Gaming Law.
Lexington, KY
T (859) 425-1058
E [email protected]
Laura has substantial experience in equine law matters. Representing owners, breeders and trainers (of both show horses and race
horses), as well as account wagering companies and racetracks, Laura draws on her passion for the industry to counsel clients toward
effective resolutions. She handles a variety of matters for clients, including the structuring of racing partnerships, syndication and sale
of stallions and other bloodstock interests, and the acquisition and sale of commercial horse farms. She also guides international and
domestic clients through the evolving challenges facing account wagering companies and simulcast agreements, including licensing
renewal, compliance and contract negotiation. She recently helped establish simulcast agreements between clients in South America
and the United States, using a keen business sense to guide the negotiations through the cultural and philosophical challenges to
reach a successful resolution.
Laura is a frequent author and speaker on gaming and equine law. She has been published in Gaming Law & Economics, Casino
Enterprise Management, Casino Lawyer and Business Lexington, and has been quoted in The New York Times, the Toronto Globe & Mail,
The Blood Horse, the Thoroughbred Times, and the Lexington Herald-Leader. She also is currently Chair of the National Equine Law
Conference. Laura is also a community leader and is presently an active Board Member of the Kentucky Chamber of Commerce,
Commerce Lexington and OperaLex.
Equine Sales & Use Tax Review | 51
Kerry Irwin
A lifelong horsewoman, Kerry grew up fox hunting and was a Jefferson and Echols scholar at the University of Virginia where she
rode at the Barracks with Claiborne Bishop. After college, Kerry taught riding at Chatham Hall, a boarding school in Virginia, before
attending Law School at the University of Kentucky, where she focused her studies on equine and transactional law.
Kerry counsels clients in a wide variety of industries on corporate matters, including governance, mergers and acquisitions, financing,
and other transactions. She also works with for-profit and non-profit organizations, as well as several trade organizations, tailoring
her approach to meet each client’s unique corporate needs.
A member of Dinsmore’s Equine Law Group, Kerry has translated her passion for horses into her practice, where she counsels clients
on equine law matters related to both the Thoroughbred and sport horse industries. Prior to joining the firm, she worked as a
Staff Attorney for the Honorable Thomas D. Wingate in Franklin Circuit Court, where she gained experience in handling regulatory
matters, including administrative appeals from the Kentucky Horse Racing Commission. She also has extensive experience in drafting
equine contracts, specifically sale and lease contracts, as well as Thoroughbred and sporthorse syndication agreements.
Understanding the ties between the equine and gaming worlds, she also is adept at advising clients on internet gaming matters,
including compliance with constantly-evolving rules and regulations. She has helped clients secure internet wagering licenses, and
her gaming work also extends into the world of pari-mutuel wagering, charitable gaming, and sweepstakes and giveaways.
PROFESSIONAL ACTIVITIES
Dinsmore Leadership Academy Faculty
Kentucky Bar Association
Fayette County Bar Association
United States Equestrian Federation
United States Hunter Jumpers Association
Kentucky Horse Council
52 | Equine Sales & Use Tax Review
Lexington, KY
T (859) 425-1034
E [email protected]
Luke Swain
Luke focuses his practice primarily on taxation, as well as trust & estate issues. He has experience handling a variety of tax issues
for clients, including federal and state estate tax matters, as well as local and state tax matters for corporate and individual clients.
Luke also has counseled clients on a variety of general corporate and traditional business matters, including transactions, executive
compensation and employee benefits.
Luke earned his J.D. from the University of Kentucky College of Law and his LL.M. in taxation from New York University School of
Law. While in law school, Luke worked as a tax preparer and site coordinator for the Volunteer Income Tax Assistance Program. Prior
to joining Dinsmore, Luke worked as an associate at LexisNexis, where he advised on research efficiency methods.
PROFESSIONAL ACTIVITIES
American Bar Association, Section of Taxation
Kentucky Bar Association, Taxation Section
Kentucky Bar Association, Young Lawyers Division
Lexington, KY
T (859) 425-1009
E [email protected]
COMMUNITY INVOLVEMENT
Co-Author: UK Law Estate Planning CLE: Employee Benefits Chapter
American Sociological Association
Equine Sales & Use Tax Review | 53
THIS IS AN ADVERTISEMENT. SERVICES MAY BE PROVIDED BY OTHERS.
© 2015. All rights reserved. Photo: ©2009 Shawn McMillen.
Laura A. D’Angelo }
Attorney | Horsewoman | (859) 425-1058
As equine attorneys, our personal and professional insights help you to
see all sides of the issues facing your industry:
State and Federal Regulatory counsel
Litigation and Dispute Resolution
Stallion and Performance Horse Syndications
Purchase and Sales of Thoroughbreds and Sport Horses
Horse Farm Real Estate
LLC’s and Partnerships
Equine Tax
DINSMORE & SHOHL LLP | LEGAL COUNSEL | DINSMORE.COM/EQUINE
LEXINGTON
OFFICES
LEXINGTON FINANCIAL CENTER
250 W. MAIN STREET | SUITE 1400
COLORADO | ILLINOIS | KENTUCKY
OHIO | PENNSYLVANIA | WASHINGTON, D.C.
WEST VIRGINIA
Notes
Equine Sales & Use Tax Review | 55
EQUINE REVIEW
Sales & Use Tax
Updated April 2015
This information is intended to be a guide and reference tool for practitioners.
State legislation and regulation are subject to frequent change.
Every practitioner should research their specific facts and verify the various state provisions at that time.
THIS IS AN ADVERTISEMENT. SERVICES MAY BE PROVIDED BY OTHERS.